Subsidies are all wet - Subsidies are all wet By Thomas...

Subsidies are all wetBy Thomas Sowell - March 19, 2004For years we have been hearing about a water shortage in the western states. To most people, that might suggest that there just is not enough water for all the people in those states. But, when an economist hears the word "shortage," it has an entirely different meaning.What specifically is a shortage? It is a situation where you are willing to pay the price but simply cannot find as much as you want. To an economist, the question is: Why doesn't the price rise then? If it did, some people would demand less and others would supply more until supply and demand balanced. Put differently, a shortage is a sign that somebody is keeping the price artificially lower than it would be if supply and demand were allowed to operate freely. That is precisely why there is a water shortage in the western states.Even in California's dry Central Valley, less than 10 percent of the water available from federal water projects is used by cities and industries. The vast

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